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ParticleGirl writes with this excerpt from the Detroit Free Press:
"GM's unusual, government-engineered bankruptcy allowed the Detroit automaker to emerge as a new company — and to shed billions in liabilities, including claims that governments had against GM for polluting. Environmental liabilities estimated at $530 million were left with the old GM, which has only $1.2 billion to wind down. Administrative fees and other claims will soak up that money, and state and local officials told the Free Press they fear the cleanups will be shortchanged. ... The New York Attorney General's Office, seeking to protect environmental claims for cleanup at Massena and other sites, argued that federal and state regulatory requirements should not be eliminated by a bankruptcy sale. ... But [US Bankruptcy Judge Robert Gerber] ruled otherwise."

Both GM ans Chrysler were let off the hook on the 10's (or it is hundreds) of billions that they owed. Then we forced Chrysler to be sold to Fiat for next to nothing. Fiat Will keep it open for th next 2 years and then close all American plants (unless some are newer than theirs) after absorbing the IP. GM is currently forcing their partners to move operations to China, rather than keep them here. Chinese gov. is insisting on it (jingoism at its best). Worse, we are STILL subsidizing them with loans as well as CARS garbage. What should have happened is that GM and Chrysler SHOULD have been broken up into multiple companies and than allowed to compete. The problem with both of these was BAD CEOS. OTH, if you break them up, then you have multiple CEOs, which is likely to leave at least several of them doing OK to great. As it is, these companies will be gone within 5 years.

GM and Chrysler should have been left to die. Period. They're businesses sucked and so did they're products.

The only thing the government bailouts did was keep these bloated poorly run companies alive for a few more years - at the taxpayer's expense. In the meantime, the execs and union members have a few more years of being over paid - at the taxpayer's expense. A few years from now, they'll be back exactly where they were a few months ago and we'll be a few hundred billion dollars poorer.

If they would have been left to normal bankruptcy, GM could have done the right thing, dropped it's union contracts, reshaped it dealers, etc.

Instead, the bankruptcy was railroaded through as quickly as possible to have the smallest impact on the unions. Ironically, this will be worse for the workers in the long run and worse for GM. Definitely worse for taxpayers as we're fleeced to shut down these companies rather than let nature take it's course.

What we're doing is the equivalent of feeding an injured deer in the winter. The deer still isn't going to survive and you wasted a lot of good food that could be used to feed more viable animals.

Quite simply, the union workers are going to get screwed no matter what, whether it's now or later. The billions of taxpayer dollars pumped into GM and Chrysler were not a solution - it changed nothing and is only delaying the inevitable. It sounds cruel, but I would prefer we cut our losses now and move on.

The contracts weren't economically feasible, and that's one of the things you do in a bankruptcy: you either liquidate the business (chapter 7 or 13), or you restructure it (chapter 11) to make it a viable operation going forward.

The worst part of the bailouts and the bankruptcy is the terrible precedent it sets: the president decided to override the existing body of law that we have to deal with failed businesses. The upshot is

Actually, what's been accomplished is worse than that. What US and Canadian taxpayers have done is essentially underwrite the inevitable move of manufacturing vehicles by Chrysler and GM to China and Mexico. I guarantee you, in ten years they won't be running any plants in the US. There will probably be more Japanese cars being made here than American cars.

The money that the government used to save those "10's of thousands" of jobs didn't just magically appear. It was sucked out of the private-sector economy. Therefore, that money will not be spent on other goods and services, so other people lose their jobs. The jobs saved are easily identifiable and politically connected, while the compensating jobs lost are not. The vast majority of the jobs saved will probably be lost in a few years, so the net is a huge loss.

That's the broken windows fallacy. Government spending just cannot replace private sector spending, not even when they look equal on paper. Private sector spending is a feedback mechanism. Good decisions get rewarded, bad decisions punished. This means bad decisions get punished before they derail the economy to the point people die.

Government spending has no such feedback mechanism. There is no specific reason that is *has* to go wrong, but there is no reason for the government to do the right thing either

Wow, your post is so fucking wrong it's amazing. You're one of these guys who thinks that capitalism has some kind of magic fucking pixie dust that makes everything wonderful. Guess what, it doesn't. The system is gamed in every fucking way imaginable to make sure the playing fields are anything but level and that the so called "invisble hand" does nothing but stroke very specific benefactors.

As for your "Good decisions get rewarded, bad decisions punished" crapola, are you fucking kidding me? The fucking dickwads on Wall Street are already circle jerking the shit out of themselves with bonuses while millions more lose their jobs, retirement, and houses. So please spare me the broken windows fallacy bullshit. Power corrupts and warps anything it touches including your god, Capitalism.

FYI...I'm actually a capitalist but I'm realistic about what it is and isn't. Adam Smith was definitely on to the right idea but he didn't get it quite right. Friedman took Smith's ideas and made them far far worse.

Wow, your post is so fucking wrong it's amazing. You're one of these guys who thinks that capitalism has some kind of magic fucking pixie dust that makes everything wonderful. Guess what, it doesn't. The system is gamed in every fucking way imaginable to make sure the playing fields are anything but level and that the so called "invisble hand" does nothing but stroke very specific benefactors.

And guess who gamed the wall street system. What gets blamed for the mess according to everyone. Oh wait... "regulations". The government in other words. Of course the fix for "wrong", "too much", "ill-conceived",... regulations is... more regulations. You know, because this set of congresscritters is so much less self-involved and so much more flexible and smart than the last batch.

What do I hear ? Nancy Pelosi not exactly Maria Theresa ? Not exactly Einstein either ? Well... what could possibly go wro

Both of these add up to the tired right wing line that the market is always greater than the government.

I would state that somewhat differently: I would prefer to buy what I choose, than to have my earnings taken from me to buy what you choose. Whether my decisions meet your approval or not, they're mine to make if I'm a free man.

The jobs saved are easily identifiable and politically connected, while the compensating jobs lost are not. The vast majority of the jobs saved will probably be lost in a few years, so the net is a huge loss.

It's OK, as long at the jobs are lost after the next election, that is the important thing. [/sarcasm]

Please learn the differences among "their" and "there" and "they're" before you decide you're going to tell us a thing or two. It's your native fucking language so quit being so silly.

Not that it matters much, but I am a stickler for good grammar but a poor editor-- I, at the last minute before submitting, changed "ARE there exceptions?" to "What ARE the exceptions?" (because surely there must be some)...except I failed to remove the "re" from the end of "there." I noticed it after I'd submitted, but figured I wouldn't trouble the overworked moderators with a dupe as well as a typo... so my apologies for having ruined your day.

Horseshit. The unions were much more complicit in the downfall of GM and Chrysler than the last few crops of CEO's at either company. Moreover, given the stock holdings that the union was given at GM, anything bad that happens to that company is now completely their fault. The fact that they sold most of it is absolutely no excuse.

So you're saying that hourly workers on the assembly lines should have refused to build the crappy designs mandated and approved by GM top management? They should have taken one look at the first Pontiac Aztek off the line and walked out in disgust? They should have refused to build any more inefficent pushrod engines when every other car company had gone to multiple overhead cams?

GM started going to hell on the day when bean counters took over top management. Until sometime in the late 1960s GM was manu

No, I think he's saying that the union's ratcheted up benefits and obligations upon the company, which forced those crappy designs down the line so that the margins would be high enough to pay for all those obligations. Unfortunately for GM, they depended on ever-increasing sales of ever crappier cars to maintain their obligations to the workers. Namely, the very important and conflicting obligations of workforce size and worker benefits: you can't increase worker pay/benefits without improving productivity (using automation as one of many tools) and laying off extra employees.

Well, you can, if you borrow against a future that cannot ever exist because you're simultaneously cutting corners left and right. And when sales couldn't keep up with the debt/obligations (unexpectedly, due to outside conditions), the gamble paid off: the government took on, co-signed, or relieved those costs.

You going to blame the JANITOR as well? In the end this was PURELY about BAD MANAGEMENT. It is THEIR JOB to made decisions. It is THEIR job to MAKE MONEY. The vast majority of car companies HAVE UNIONS (all of the europeans) and YET, they make money. In fact, the best one currently is VW. They are going like gangbusters. Why? BECAUSE OF GOOD MANAGEMENT.

the total cost of employing someone at the imports were roughly $38 an hour compared to $78 am hour at GM.
Really? Please show those numbers BACKED UP by real accountants and real numbers (not something pulled out of the air on Faux News). Just a bit ago, It was argued by the federal gov. that GM and Chrysler unions had to lower their average pay from 36 to 34 which is the same pay as Toyota, Honda, etc had (IIRC, the average length of time by the employees was disregarded; GM and Chrysler had on average

Really? Please show those numbers BACKED UP by real accountants and real numbers (not something pulled out of the air on Faux News).

I'm not sure what is wrong with your Google finger [google.com] but this information is nothing new [manufacturing.net] and has been a topic of discusion around the entire ordeal since well before the bailouts.

Perhaps the problem is that you are not watching Fox news because you shouldn't be that clueless over something that fucking well known. My guess is your probably not paying attention at all and only like bashing Fox news because you are an idiot who thinks it's fashionable when others do it. That's fine and all but your being pointed out.

Just a bit ago, It was argued by the federal gov. that GM and Chrysler unions had to lower their average pay from 36 to 34 which is the same pay as Toyota, Honda, etc had (IIRC, the average length of time by the employees was disregarded; GM and Chrysler had on average a much higher cumulative time).

Yep, I was right, you are not paying attention at all. Total costs of employmment is not average wages. You are arguing the shirt is green instead of red when your not even looking at the same shirt. By the way, how long ago is a bit? Is it a pinch ago, is it 01 ago, a teaspoon ago, Oh well, it's a mystery I guess.

As to the 78/hour figure, I believe that includes such things as retirement and medical health pay for retirees. OTH, other nations such as Germany and France have socialized medicine where a tax is placed on the good, but it does not count against the employee.

No, it didn't include already retired people. That's a separate fund and part of another accounting snafu. But it does cover wages, insurance, retirement contributions and so on for the current employees. So yes, while it is more then an average wage (which I never said differently), it is not counting people who no longer work with GM. And yes, Toyota or any other car company can be put in the exact same situation if their unions get the kind of control they had over GM.

You should learn about the costs of employment verses the average salary. They are not the same and yes, there is a hell of a lot more costs to employment then healthcare. There are pension programs, employment taxes, FICA contributions, unemployment insurance and tons of other costs.

Now I'm going to ask you to use your fucking brain for at least once in your life. Learn about employment costs.

When I worked in the insurance industry we used to have a spreadsheet template that we would take to benefit fairs/employee meetings. We would punch in the employees annual salary and family situation (single/married/kids) and it would spit out the actual amount of money that the employer was paying out. This would include the salary itself, the employer portion of FICA, health insurance, disability insurance, unemployment insurance, employer contributions to 401(k)s and 403(b)s, employer matching on annu

Very good points. I'm not too keen on government taking over healthcare, but my one consolation is that it has to get worse before it gets better. The private industry has failed, and though much of that failure is due to unmitigated greed, much of it is also due to problematic regulation and entrenched practice.

The system is broken from top to bottom. There are a limited number of slots available for new medical students even though there is a shortage of doctors, and many good candidates get turned away (conversely, many bad candidates are accepted in years when there are more spots than good candidates). Once accepted, school is exorbitantly expensive, incurring massive debt to the students (this is a serious problem with the educational system, which is a whole other argument). Once students begin practicing (first as interns, then as residents) they work ridiculous hours, forcing sub-optimal performance in life or death situations, which leads to excessive mistakes. Mix with a sue happy populace and medical insurance costs force prices for healthcare to skyrocket. Now, very few people can afford proper medical care without insurance, and the insurance companies cheat the doctors and the patients as well as the businesses that pay a significant portion of the insurance costs. From what I have seen, it costs more per person to be covered under a business healthcare plan than it costs to buy an individual plan, but because the employer shares the burden, it costs the EMPLOYEE less, while the insurance company enjoys a larger margin.

So, much of the change needs to start with the educational system and the AMA, which no private industry can seriously expect to force. Then, changes I can't even begin to fathom need to take place in the legal system in regards to malpractice and also in terms of acceptable hours for medical professionals.

But, I digress, this is a discussion about the botched bailout of the auto industry where our elected leaders ignored the screaming of their constituents (except in Detroit) and spent over a trillion dollars of taxpayer money to line the pockets of the fat cats that paid for their elections. I don't know about you, but I am voting every single one of those fuckers out next election. Any one of them who didn't vote "no" gets a "no" vote from me to make up for their missing one - abstaining is equivalent to a "yes" vote as far as I'm concerned. And the same goes for the bank bailouts. There is no such thing as "too big to fail" - governments do it all the time, and life goes on. If a government can fail without it being the end of the world, a business certainly can.

Bah, I forgot to write a conclusion to the statements made in my introductory paragraph. I expect that the plan for government run healthcare will fail. We've seen examples of it all over the world where nations that have had socialized medicine are realizing the mistake they made. Why our government thinks it is smarter than them when it failed to even see the economic meltdown coming, I can only imagine (I knew before the height of the housing market that it was going to burst, and I am not a professional

You want to know why we are seeing the slow death of the US car companies? It is actually very simple: Free trade is a lie. does anybody remember when we had TVs and stereos made in the USA? I do, and I remember what killed them. Free trade is a lie. It is a lie and a fantasy because you can NOT call allowing countries like China, which allow the corps to poison the land and their own people, to place their products on the same shelf as those that don't fill the air and ground and water with toxins "free tr

It's even worse. Ford (or more accurately, CEO Alan Mulally) saw the impending doom and got ahold of as much cash and lines of credit as they could and were able to avoid bankruptcy. Car companies (especially GM!) don't make money by selling cars so much as they do by financing car sales. GMAC was also the recipient of multiple rounds of government financing and has FDIC backing and access to below-market government financing. In order to increase GM sales, GMAC lowered their standards (sound familiar?) and offers 0% loans. Meanwhile, Ford Motor Credit needs to borrow money on the open market at rates of 10% or so.

If you look at Edmund's analysis [cnn.com] of the CARS program, Ford has 4 of the top 10 (including the higher margin F150 and escape SUV). The official government figures [cnn.com], however, are broken out so that high milage (and mostly foreign) cars look more popular.

If you look at Edmund's analysis of the CARS program, Ford has 4 of the top 10 (including the higher margin F150 and escape SUV). The official government figures, however, are broken out so that high milage (and mostly foreign) cars look more popular.

Thanks. I can't think of a way to describe the government statistics as anything but "misleading". It really doesn't matter, though, whether the Focus or the Escape is at the top of the list, except for PR purposes. What does matter is the aggregate fuel econom

Why do Fords US cars suck so much? A friend of mine owns the new Ford Fiesta which I think looks stunning and she tells me shes getting 50 MPG in a car thats quite happy to get to 70+ MPH. The Ford Mondeo is a very nice car which gets good mileage and the Ford Focus usually manages anything between 30-60 MPG depending on the engine. I'll admit I can't stand the look of the new Ka but again its a car design to commute inside towns. The 2 Litre Focus TDI (with all the mod cons) is probably the most fun car I've every driven, not as capable as a Audi A4/A3 or a Mercedes C class but alot of fun. While I chucked that car around corners and gunned it off traffic lights I still got 55MPG. It should be noted any Focus below 1.8 litre can't pull the skin off of a rice pudding.

Its the same with GM, Vauxhall/Opel have some very well engineered and fuel efficent cars sure the Corsa/Brianna are probably to small for America. But the Astra and Vectra are both cars big enough to fit 5 grown men, have high safety ratings and get good mileage.

I understand American cars all have to be 20ft long for some reason but why don't Ford/GM sell their european cars in the US. They get great mileage pretty much all have 5 star NCap ratings (very safe), you can usually get all the Mod cons from GPS to Air Con. There wasn't any need for GM to sell itself to Fiat for engine technology when Vauxhall/Opel already had good engine technology.

Ford is weird like that. They make some wonderful cars for the EU market, and then utterly fail to bring them to the US. This happened with the Ford Focus a few years back, where the Euro Focus was being hailed as an amazing car, while in the US they flat out refused to import the platform, citing the "expenses" of bringing over the car. Meanwhile Mazda took the exact same platform and produced the smash hit Mazda 3 & 5. Only recently was it announced that the 2010 US versions of the Focus would use their international platform as an "experiment" that might actually convince them to do what they should have done years ago.Also, to add insult to injury Ford has never considered releasing the Focus RS in north america, the best they've ever done is the SVT which was soundly crushed virtually every other sporty compact on the market.

As far as Opel/Vauxhall cars go, you can buy some of them in North America but not too many. The Opel Astra is simply the Saturn Astra, which is a great little car. The Opel GT has been doing quite well as the Saturn Sky and Pontiac Solstice too, though personally after driving one I must say I was not impressed. The Vectra (now Insignia) isn't itself sold in NA but the platform itself is hugely popular, being shared with the Chevy Malibu, Pontiac G6, and Saab 9-3.

It's even worse. Ford (or more accurately, CEO Alan Mulally) saw the impending doom and got ahold of as much cash and lines of credit as they could and were able to avoid bankruptcy. Car companies (especially GM!) don't make money by selling cars so much as they do by financing car sales. GMAC was also the recipient of multiple rounds of government financing and has FDIC backing and access to below-market government financing. In order to increase GM sales, GMAC lowered their standards (sound familiar?) and offers 0% loans. Meanwhile, Ford Motor Credit needs to borrow money on the open market at rates of 10% or so.

Ford's failure to declare bankruptcy put it a disadvantage - GM reduced debt costs and other costs via the courts; giving it a decided financial advantage. It's sad but Ford would probably be better of doing the same in order to stay competitive. My guess is they are renegotiating as much as possible with the threat of bankruptcy in the background.

Those 0% interest car loans are really just GM et. al. buying down the loan interest rate with the rebates they offer- you can do the same thing on many loans i

It's funny how companies talk about free-market and ask the government not to regulate their market when the economy is good. But then when the economy goes bad, they put their tails between theirs legs and they ask for government help.

This is no longer a free-market A government owned car compagny? It feels like communism.

They don't merely want to do that, they actually do it. A corporate entity's rights are vastly superior to those granted a human citizen here in the US. That's what makes this country a socialist state for the rich, and a totalitarian state for everyone else.

Actually, you can deduct all of those things if they are part of your income generation and not incidental private expenses.

I don't think you realize that a corporation is nothing more then an income generator. You can write the same shit off without a corporation being present as long as it follows the same guidelines of income creation.

Wall Street, instead of having to wait for Reagan's tax breaks to make money found a new comer who accelerated the plan buy just paying them the money upfront.

GM and Chrysler were bailed out for Wall Street and the Unions. Though don't confuse Unions with the rank and file, I am talking about the leadership who decides where the money is spent and offer muscle to intimidate anyone the administration doesn't like (see AFL-CIO's new leader who thinks murder and violence are fine if you can get away with it - or pay it off).

GM had the ultimate sweet heart deal of the two rescues. Not only did they get out of cleaning up all their pollution they also got a tax bump by keeping the tax write offs from bad GM to prop up new GM. Hence companies which play by the book and make sensible deals like Ford get doubly screwed.

Send Washington a message, avoid GM and Chrysler products. We are being run over by the goons in Washington and since our vote counts for very little the next year the only fight we have left is our pocketbooks

I do not know of a case where a private firm paid for the cleaning and mitigation of it's own mess. It just isn't done. It is just too simple to delay the process, in which the case we the people have to step in to protect ourselves, hoping to get some compensation later on.

For instance, the Exxon Valdez has never been fully cleaned up and the funds to help those damaged has yet to be paid. You can bet if I burned down the exxon building, they would make every effort to have me pay for every cent that

The alternative is that GM goes completely out of business and is no longer a going concern, and then the liability of cleanup still falls on government, if it ever got done at all.

$530 million is a lot of money, but what's the total salary and benefits of GM's BoD and C*O-level executives? I'll bet it's in the billions. Make them pay for it -- by garnishment of wages if they stay on, or if they quit, make the IRS responsible for collecting the money. I guarantee you, we (as in We, The People) will get the money back. They might, I don't know, have to sell off a few private jets or something. Boo hoo.

Oh wait, that would be socialist and if it became standard practice we might sca

You will be saying "Oh noes" when the best job you can get is flipping burgers at some drive through joint.

And yes, it's worse then becoming a socialist country. The Constitution give the US government no powers to do what you have described. If they attempted to do it, then you can expect them to ignore the constitution in matters that you find important too. Matters like searches, habeas corpus, the right to a fair trial and so on. Perhaps they will ignore the first amendment while they are at it.

that's not true. the leglislative branch can dole out money for anything it likes. It can't make laws that give it sweeping new powers, but it does have power of the pursestrings, so if it gives you money it certainly has the right to tell you to give it back and under what conditions.

If they don't take any money from you, THEN the us gov has no power to garnish wages or the like, except perhaps if a previous arrangement had been broken and that was a term of that arrangement (I don't know what the pollut

You will be saying "Oh noes" when the best job you can get is flipping burgers at some drive through joint.

The point, which you're clearly missing (or dodging, I suspect) is that a hell of a lot of Americans can't get any job better than burger-flipping -- or even that -- because of the supposed expertise of these executives of giant corporations who supposedly possess some expertise in running businesses. All this "top talent" rhetor

I'm not missing or dodging anything. Life is what you make of it, not what the government hands you.

Which conflicts with your claim that "the best job you can get is flipping burgers at some drive through joint" if GM's executives are forced to pay for the mess they have made, causing top scamming talent to flee the country.

In other words, fuck the environment, fuck everyone else, fuck any responsibility for anything that any corporate entity does to anyone or anything, ever. Capitalism means being able to take a huge steaming dump in the neighbor's pool and then just walk away from it, and that's the way it should be.

I think that's what you meant to say.

Or perhaps, just perhaps, the system could and should be weighted towards subdising and guaranteeing jobs that clean up pollution, rather than jobs that create it. They

If General Motors (GM) were allowed to enter bankruptcy without a government bailout, then GM would likely have been purchased in whole, or in parts, by a European or Japanese auto company. The purchaser would have assumed all of GM's liabilities. Of course, the sale price would have been set to reflect the costs of these liabilities.

However, because Americans allowed Washington (and Barack Hussein Obama) to effectively nationalize GM, Americans received the worst of all worlds. Washington poured billions of dollars into the company, and that money comes from future taxpayers. GM retains its rotten management although some talking heads at the very top of the pyramid were replaced: that management misread the market and failed to steer research and development toward highly efficiently small cars when gas prices were skyrocketing. Unions with their gold-plated medical insurance (now paid by the government) retain a stranglehold on the company, now literally owning part of GM.

Worst of all, we discover that the "new" GM will not be paying the costs of cleaning up the environmental pollution that the "old" GM caused.

We could have avoided all these problems if either Toyota or Renault had purchased the relevant bits of GM. Why do Americans "fear" working for a Japanese or French boss so much they are willing to nationalize a car company?

Why do Americans "fear" working for a Japanese or French boss so much they are willing to nationalize a car company?

Americans don't fear working for a Japanese or French boss, the UAW (the union bosses much more than the rank and file) fears a Japanese or French owner of these companies because in either of those cases if the UAW insisted on wages above market, the owners would just close the plants. This takeover never had popular support among Americans, check the polling data.

If GM had escaped from its union contracts through a bankruptcy, it would have started a trend of other severly underwater employers using the same tactic to escape their union responsibilities. No Democrat administration could possibly allow the end of union featherbedding and union gold-plated benefits. Hence the bailout, with the assurance that the unions would continue to receive their benefits.

There was no other way it was going to happen without a Reaganesque union-busting administration at the helm.

You sound disparaging of unions. Businesses are always pulling crap. They'll take everything we let them take. They're always looking for an angle, always trying to game the system. They feel they must, to stay competitive. If we let them, they would lower wages to nothing, pay in "company credit" good only at the highly profitable, highly marked up company store, lobby for bad laws that are entirely too favorable to them, and use our police, paid for by our taxes, to enforce those laws. Unions arose in defense against this sort of abuse. The workers saw that the corporations got their way through organized might that no individual could hope to match. They had to organize. For their part, many businesses are secretly glad of restraints that work. They're often unwise but not completely stupid, they know there are destructive forms of competition. It's a comfort to know they don't have to engage in some of that sort of competition because their competitors can't do it either. Some of their protesting is for form. A pity the free market extremists don't see that.

Businesses are like professional athletes who are so committed they'll do anything they can to win. Taking performance enhancing drugs would be the least of it. How about busting a competitor's knees? Bribing or threatening the officials, or the competition? Sabotaging facilities, or the competitors? Pretty easy to win if the competition's transportation couldn't get them to the game, or they all came down with the flu. Then there's changing the rules of the game. Suppose a team got a dubious rule passed that coincidentally bars most of an opposing team's players from playing, while disqualifying almost none of their own? Then later on rails against those same rules as examples of government red tape and interference, when they themselves were the ones who put those rules there? It's easier to bully governments into making changes if they've first been made to look stupid and incompetent. We have to have good rules and enforcement, unless you'd prefer chaos and seeing all the best athletes dead of stress, steroid abuse, and the myriad other hazards of the profession before age 30?

This dumping of polluted sites is classic. Mining operations pull that one all the time. They get to estimate how much pollution their operation will cause, because they wrote the laws on that. Naturally they underestimate as much as they can. For a few years they mine the material and rake in the profits. They shelter those profits, and then declare bankruptcy and leave us to clean up the massive mess they made. Of course the mess is ten times more expensive to clean up than they estimated, and because they planned to declare bankruptcy all along, they did nothing to mitigate the mess when it would have been cheaper.

That ship has sailed. All those jobs will be moved to China anyway. Paying a few billion to prop up GM is a drop in the bucket compared with the massive economic & political forces at work to ensure this happens.

After that, I suspect the unions will look for direct government subsidies without all the legal niceties of running the subsidies through the legal fiction of a car company called GM.

Unions are abysmal to. I'm going to buck a trend and go with an Airline analogy. Remember a few years ago when Delta went bankrupt. Its pilot's union had managed to finagle wages something like 3x the industry standard and absurd benefits. One of the first things Delta did in bankruptcy was to re-negotiate all those union contracts. It worked out pretty well, Delta returned to profitability in ~2 years if I remember correctly.
Unions are a necessary evil. They are needed to ensure that workers aren't run roughshod over. However, in cases where the Union gains too much power and uses it unwisely, they can destroy companies. Afterall, the purpose of unions is almost in direct opposition to the profitability of the company. Delta was my first example, they were almost certainly a contributing factor in the car companies downfall. Is there a reason that autoworkers should have their healthcare covered for the rest of the lives by a company funded health program? I can't think of a reason.
It doesn't really matter though, the unions have been rewarded with an automaker to do with as they please for their troubles, and its too late for any of us to do anything about it.

Funny how some businesses 'must have unions to protect employees' but others don't. Tell me exactly, why is it the only place I see unions are where the employees are treated far better than they are worth and have all sorts of bullshit incentives.

The problem isn't unions good/bad, business good/bad or government good/bad. Its simpler than that. I know it sounds trite but the old adage is true, "power corrupts." Whatever the power, union, big business or government, it will become corrupt and ultimately only interested in its own growth and expansion. I think we know that and try to balance power with power. So you have big business that we balance with unions and government. But what eventually happens is these centers of power start working t

One of the basic reasons why GM was underwater finacially was because of pension committments made as part of union contracts. Their only way out of these, legally, was to declare bankruptcy and have the government take over the pension plans. As far as I know, no other legal transfer of them was possible, other than outright sale of the entire company.

Penion plans are written in ways to as to prevent them from being shifted around or passed over to the government except in very limited circumstances. It

If General Motors (GM) were allowed to enter bankruptcy without a government bailout, then GM would likely have been purchased in whole, or in parts, by a European or Japanese auto company. The purchaser would have assumed all of GM's liabilities. Of course, the sale price would have been set to reflect the costs of these liabilities.

While it is fine to complain, this is living in a dream world. The whole point of bankruptcy is to shed liabilities because they CANNOT all be actually met. GM's parts would have been bought for less than pennies on the dollar (because everyone else is broke too) and that tiny amount would have been split up among its creditors -- effectively leaving them with nothing. This is the whole point of bankruptcy. This is to teach the creditors a lesson that they should pay more attention to what the company

Sorry but when you specifically mention Obama in a comment like that makes it sound like he had some primary responsibility in the nationalization of GM. Before Obama ever came to power, the Bush administration had donated about $15 billion to GM, becoming a major shareholder. I think that the government would have ended up nationalizing GM no matter who was president.

The profitability of the 'new' GM requires no explanation. $533M in environmental cleanup is a negligible expense by comparison to the value of the brands GM has developed globally. If the government was willing to buy out GM entirely, obviously they would be willing to absorb the clean-up costs to facilitate GM's survival under other ownership. The costs were inevitably going to fall on taxpayers no matter who bought GM, but only by buying out GM do taxpayers stand to get anything back. Anyone wishing

[sigh] Is John Sidney McCain III ashamed of his full name? If not, why didn't he use it in his campaign literature?

This wide-eyed, fake-innocent "but it's just his name" bullshit is really childish. You know perfectly well that the only reason to say "Barack Hussein Obama" in a regular political conversation is to make him sound more foreign, more menacing, more eeevil. Look, you don't like the guy, you don't like his policies, fine. There's plenty to criticize on that basis. But the Birther / Secret Muslim / Not One Of Us rhetoric accomplishes nothing except reveal much of the opposition to Obama as racist, religionist, xenophobic craziness.

Frankly, I think of it as subverting the Obama brand. It's not just a name, it's a brand. And words have power. Referring to him in such a manner robs him of the messianic power of the "Big Mr. O who will save all of us from certain destruction" meme that is very prevalent (heck, it's a religion in certain quarters...i.e. the mainstream media.)

All I heard for decades was how vitally important it was to subvert the existing authority in every possible way. Funny how subversion is a bad thing as soon as y

What is obvious? Does the name offend you? Does it make you uncomfortable? If so, then why?

What's obvious is what I said in my original post. The name "Barack Hussein Obama" doesn't make me uncomfortable at all. Its constant use does makes me uncomfortable, because of the wacko xenophobia it reveals in so many of my fellow Americans.

Does "John Sidney McCain III" offend you, or make you uncomfortable? If so, then why? And if not, then why didn't we hear it being thrown around doing the 2008 campaign as o

George W. Bush was called that to distinguish him from his father, a la John Quincy Adams.

I've rarely heard Eisenhower called Dwight D. Eisenhower or Dwight David Eisenhower. Same for Clinton and Nixon. Generally you only hear Presidents' full names given on ceremonial occasions (e.g., "I, Firstname Middlename Lastname, do solemnly swear..." or "I present to you the nth President of the United States of America,...")

George Herbert Walker Bush was only called that, IIRC, during the 1992 campaign when Cli

Geeze...what's with this incessant need for conservatives to resort to childish name calling? Hussein Obama? Real mature. And how the heck does a post like this get modded up to 5? Is Slashdot being overrun by GOP comment-for-hires?

The assumptions made in this post are ridiculous. Everything would have be rosy if GM had just been allowed to go bankrupt? GM wasn't ENTIRELY at fault for their downfall. Don't forget that nobody is purchasing cars because of the financial crisis. They would still be around if that had not occurred. You say that someone like Toyota would have swooped in an bought up the pieces. But how realistic is that? NO car companies are doing well right now, not even Toyota. This isn't the environment for car

I used to be a full-fledged Libertarian who believed the mantra that all regulation is bad. But unfettered capitalism is not the panacea you think it is. Unregulated capitalism is like a race car without brakes. It can go really fast, but is prone to horrific crashes. And unregulated capitalism essentially means NO middle class. If you want to see what unregulated capitalism looks like, look at what it was like in the United States at the turn of the 20th century (or look at China today). You had two classes of people...the haves and have-nots. The lower class had to work 14-16 hours a day, 6 days a week, for slave wages, with no job security (you get hurt, you get fired). Don't like working like a slave? Tough luck! It was good for the economy though. Sick people didn't live long enough to be much of a drain on the economy. The so-called "socialist" policies put in place during the 1930's resulted in the expansion of the middle class in the 40's and 50's. Otherwise, you'd likely still be working in a sweatshop right now.
Of course too much regulation is bad for the economy. But no regulation at all leads to hell-on-earth working conditions for most, and all wealth concentrated in a very small population. Therefore, the best choice is some limited regulation and intervention by the government when absolutely necessary.

Why do Americans "fear" working for a Japanese or French boss so much they are willing to nationalize a car company?

The first thing a Japanese boss would do is throw the union out, just as has been done in all of the Japanese car plants in the US. A French boss might not do that, but they might as well. I believe BMW threw the union out of their plant in the US.

So a foreign owner would probably mean no union. No Democrat administration could tolerate that. I don't think anyone in the federal government gives a rat's ass about what the American people want. Nobody likes the bailout situation and nobody is in favor of

And the taxpayer will be on the hook for the cleanup. Yes, a wonderful deal had by all, well almost all.

I think the time has come to start making corporate officers and management personally libel, and then start seizing assets and tossing them in jail when things like environmental cleanup are evaded by the company. Wouldn't it be something to a former CEO sitting in a prison cell while every asset he owns is sold off to pay for the decisions that he made. It would be a victory for personal responsibili

Normally, when a company goes into bankruptcy, the assets are liquidated and the bondholders/etc get to split the cash.

That's Chapter 7 [slashdot.org] - liquidation. Chapter 7 bankruptcy is very rare. GM, like most corporations going through bankruptcy, is going through Chapter 11 [slashdot.org] - restructuring. That's where the Judge makes the company pay off as much of the debt as it can, cancels the remaining debt, and compensates the creditors with stock in the new company. The theory behind it being that the restructured company will be worth more to the creditors and the public at large than selling the parts off at a fire sale.

They probably should have changed the name of the company at the same time, such as Universal Vehicles or something, as a holding company, and legally spun off each major division to avoid BS lawsuits like this. Keeping the same name might be nice for traditionalists, but what came out of bankruptcy is essentially a new, private company.

While the bankrupcy itself was unusual, it's not unusual at all for corporations to receive relief on environmental cleanup and associated fines during bankruptcy. State and Federal governments ends up with the tab for the cleanup.

The fundamental basis of Chicago economics (which we've been using for the past 40 years) is that people and thus businesses are rational actors and make decisions that are best for their own interests.

That's pernicious fucking bullshit. People and companies make irrational decisions all the time. Consider the EPA cleanup mess: according to the idea of rational expectations, the prospect of having to pay for an EPA cleanup would be a strong deterrent to polluting. In reality, nobody cares, because the perso

Or whatever it's called.The US people are now completely crispy fried when it comes to our debt. At this point I just laugh and cry a little every time I hear about a new 'program' or 'bill' or 'solution' that comes out of the administration's or Congress's mouth.

This is a classic example of externalities being dumped onto the community. No matter what happens the taxpayer will bare the burden of cleaning the toxicity of GM's effluent be it a federal or state government. What's worse is I doubt there are any obligations on the "new GM" to improve their practices to avoid the exact same scenario in the future.

Clearly our (international) systems of corporate governance is so outdated that requires significant review and improvement to bring it into the 21st century.

This is not capitalism any more it's corporatism, if it was capitalism you wouldn't hear phrases "Too big to fail" you would be hearing "You should have managed your business better". What I don't understand is why individual welfare that mitigates social problems such as preventing people from falling into crime is discouraged and corporate welfare that encourages white collar crime is applauded(???).

For there to be future sustainable business models they must go beyond environmental sustainability, which is the entry point. We are going to have to see business models emerge that are fiscally sustainable, socially sustainable and have agencies with enough teeth to re-write or revoke corporate charters if business does not behave like a good corporate citizen. I don't just mean the veneer of 'corporate responsibility' but measurable responsibility as in 'how much waste was re-processed' and liability that reaches right back into those who made and funded the type of decisions that leave communities hundreds of millions of dollars of externalities to contend with. In essence that is converting taxpayer money into shareholder dividends by forcing those externalities onto the taxpayer.

If we don't we are going to find ourselves in a real depression when the real costs of these externalities are realised, capitalism a spent economic force and corporatism too big to sustain.

This is what 30 years of Reaganomics rantings have brought us to. People are so anti-government and pro-business now that we've largely swept away the important restraints on the market born from the first Great Depression and the boom and bust cycle our economy endured for our whole history. What scares me is that even after a return to pre-Great Depression boom and bust cycles, people are still crying for more of the free market that's opening the door for the corporate elite to shaft the industry. Oba